Glaxo-Wellcome Site, Beckenham

New clause 16 – in the House of Commons at 10:32 pm on 27th June 1995.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]

Photo of Mr Piers Merchant Mr Piers Merchant , Beckenham 10:33 pm, 27th June 1995

I am grateful for this opportunity to raise a matter that is of considerable importance to my constituency, but that also affects other constituencies in the south London region. I am pleased, and appreciate, that my hon. Friends the Members for Chislehurst (Mr. Sims) and for Dartford (Mr. Dunn), who are also affected, are present. I understand that my hon. Friend the Member for Dartford wishes, with your permission, Mr. Deputy Speaker, to add a few words when I finish.

Exactly a week ago, Glaxo announced the closure of the Wellcome research site at Beckenham. A total of 1,550 jobs will be lost at that location. There will be a long-term impact on the local economy and a premier research and development facility will be abandoned. This is obviously a matter of great concern to my constituents and to all connected with the local economy.

The closure will also impact heavily across the entire London borough of Bromley, affecting the constituencies of my hon. Friends the Members for Chislehurst, for Ravensbourne (Sir J. Hunt) and for Orpington (Mr. Horam). It will also be felt elsewhere in the south-east. As an indication of that, I believe that about 400 or just over of the employees at Beckenham live in the Dartford area. My hon. Friend the Minister of State will be interested to know that some 120 of them have ME postcodes and a further 140 have TN postcodes.

Restructuring of the former Wellcome sites was widely expected after the takeover of Wellcome plc by Glaxo. I regret the fact that Wellcome was not able to continue as an independent company and that the Beckenham site was chosen for closure. However, I do not blame Glaxo-Wellcome for rationalising. The management have a responsibility to run their company as efficiently as possible. Glaxo-Wellcome is a great British company, operating in one of Britain's leading industries. It contributes enormously to our economy as a whole; to exports, employment, wealth creation, discovery and healing. I wish it nothing but well. However, I also care deeply about the future of the former Wellcome employees and their site.

I have been in touch with Wellcome and Glaxo-Wellcome about this matter for some months. Last Tuesday, the chief executive of Glaxo-Wellcome, Sir Richard Sykes, invited me to a meeting immediately after the announcement was made. I had a long talk to him and I know that he has agonised over this decision. He also went out of his way to stress that his company will do all that it can to fulfil its social responsibilities and to look after the Wellcome employees it inherited. In a letter to me he said: I can assure you that those who are made redundant will be offered generous severance terms, and the company will also provide extensive support by way of counselling, retraining and outplacement through an on-site Resource Centre. We shall, of course, be consulting trade union representatives about the implications of the closure.My colleagues and I well recognise the scientific contribution and reputation of Beckenham over the past 70 years. We are also very conscious of the impact which the decision to end Wellcome's long-standing presence will have on the local community. We shall be discussing … what we can do to help to alleviate this impact. Even in the few days since then, Glaxo-Wellcome has said that it will commission a full study of the impact of the changes and that it will produce a package of measures to help the local community.

Over the past few months, I have also worked closely with the leader of the London borough of Bromley, Councillor Dennis Barkway. Councillor Barkway was swift to set up a council working party to help tackle the problems in the wake of restructuring. His response, has I believe, been laudable, indeed impeccable.

We would all like this to be a copybook example of how to minimise the impact of a major jobs blow such as this. However, I believe that the time has now come for wider involvement. I am raising this matter because I believe that there needs to be some Government input. I hope that my hon. Friend the Minister will assist by ensuring that her Department, the Employment Service and perhaps also the Department for Education and the Department of Trade and Industry will help with the expertise that they can offer.

I am not holding out a begging bowl. Although unemployment is now above its usual level in my constituency—I mean the level before this announcement—we could hardly make a case for being a deprived area. We see this not as a problem but as an opportunity, looking to the future, not the past. Nevertheless, no community can take so big and sudden a loss of jobs without some shock. I believe that Government expertise is needed in three areas. It is needed, first, to help those made unemployed. The position is not as bad as it looks. Although 1,550 jobs are going, Glaxo has approached the matter in the most sensitive way possible. The jobs will go over three years—not all at once—in gradual stages. Many of the existing employees will be offered transfers to other Glaxo locations. Some will want to take an attractive package of early retirement. Others will, no doubt, accept generous redundancy arrangements to pursue alternative opportunities elsewhere.

Many of the people about whom we are talking are highly qualified, highly skilled professionals. They are unlikely, for the most part, to have a great problem in finding other opportunities. There will, however, remain a hard core of former employees who will lose their jobs and who will have no immediate alternative job on offer. Glaxo has already promised those people help, as have the borough and the South London training and enterprise council, SOLOTEC. Further Employment Service support is, however, essential.

Secondly, there is the impact on the economy. This is more severe because it is likely to be more long-lasting. There will be a loss of 1,550 employees, some 1,300 of them working in research, with an average annual income of about £23,500—well above the national average—which will leave a big hole in local spending power. I am always wary about economic theories and figures so I am particularly wary about predicting how big the hole in local spending power will be. However, it is obvious that the loss of about £29 million per year in wages will have an impact on spending power in the area and will probably have a knock-on impact as well, whatever one believes about the theory of the economic multiplier.

The loss of the employing company itself, which clearly spends a large sum on locally produced services, will have a further impact. Help is needed in overcoming this problem in the short term and in seeking a replacement in the longer term. In other words, my constituency needs, for the sake of the local economy and for a balanced economic structure, a business or businesses to replace Wellcome.

Thirdly—this next point could be linked with the point that I have just made—there is the future of the site itself. Here is a ready-made research and development facility, fully equipped, purpose-built and stand-alone, in spacious, well-laid-out grounds. I do not mean this to sound like an estate agent's brochure, but I know that anyone who visited the site would realise that it was extremely attractive—indeed, a beautiful site. That adds an extra dimension to the very specific services there for research and development.

The site is also very well located. It is 30 minutes from central London and it is just a few miles from Croydon, which is itself a big centre. It has easy access to the M25 and to Gatwick airport. It is also on the edge of London so employees can easily live, as many have chosen to do, in the Kent and Sussex countryside. The site would best be used for its present purpose and I hope that my hon. Friend the Minister will lend her Department's weight to that ideal. I appreciate that there is not exactly a long waiting list for research sites, but I know that an off-the-shelf site is not often ready and available.

Britain's research and development base is vital and it is a vital part of the overall economy of the south-east. It would seem a great waste to allow part of it to slip away, especially when the site has so many advantages and when so many of the facilities are state of the art and very recently constructed. If possible, I hope that the route of reusing the site will be taken. If that proves impossible, I trust that the Department of Employment, the Department of Trade of Industry and others will work with the London borough of Bromley to find an alternative but, I hope, similar use for the site.

One idea worth examining is to transfer the ownership and running of the site, apart from the biotechnology section which is likely to be the last to move, to a separate development company or something similar. Such a company would have a remit to market the site and to make sure that its availability was known and its strengths championed. It would involve Glaxo, which would probably be willing to take part, the council, which is keen on the idea, SOLOTEC and perhaps other elements from Government Departments. Once a future was found, the company could either pass over its ownership to the new operators or could continue to run the infrastructure of the site, which has its own roads, if that were necessary. That would be useful if a number of different operators shared the site in some form of science park.

The loss of jobs in the locality is part of the general outward drift of jobs from central London. It is important to try to stop that process, as it is potentially very damaging to the capital and to the people who live in the capital. The Wellcome site would best serve the area by continuing to be used for employment, rather than for some other purpose.

I hope that Glaxo-Wellcome will help in the endeavour to attract new jobs to the site. It could assist by giving financial incentives to attract a new employer, such as soft loans, guarantees or possibly a rent-free period. I know that all of those avenues will be explored, and the Government could assist in encouraging that process.

The site cannot be developed for major industry because it is located in the middle of a high-quality residential estate, and it would be an affront to the planning process if inappropriate major industry were sited there. We do not want any more retail parks or high-density housing, as they would not fit in well with the existing structure of the area.

The Langley court site is part of the history of Beckenham. Since 1922, its laboratories have been of great service to all mankind and local people are proud of its achievements. It is a part of the community and contributes to the diversity and balance of the area. It has provided employment for seven decades, and has put a lot into the local economy. I strongly encourage a co-operative spirit to overcome the present difficulties, to find a future for the site, to encourage new job creation and to alleviate the personal trauma that inevitably arises when industrial change comes.

Photo of Mr Bob Dunn Mr Bob Dunn , Dartford 10:46 pm, 27th June 1995

I begin by thanking my hon. Friend the Member for Beckenham (Mr. Merchant) for giving me the opportunity to say a few brief words in support of the case that he has put forward so ably tonight. He pointed out that the decision to close the Wellcome research site over the next three years has implications not just for the London borough of Bromley, but for all communities in west Kent, north-west Kent, Surrey and south London.

The histories of the Wellcome Foundation, or Burroughs Wellcome as it is known locally, and north-west Kent over the last 100 years have been one and the same. The contribution that the company has made to the levelling-up of standards in employment, the creation of employment and assistance to the town of Dartford and to other towns in which the company has been based has grown and grown.

Like my hon. Friend, I was somewhat concerned when the anticipated announcement was made a few days ago. The affect of the announcement was that the manufacturing site at Dartford is to be maintained and retained. That is good news, not just for Dartford but for all communities in the area, given the mobility of labour. Alongside the decision to retain the Dartford manufacturing site was the decision to close the Beckenham site.

As my hon. Friend said, more than 400 persons employed at the Beckenham site live at an address with a DA post code, which includes the London borough of Bexley, Dartford and Gravesham. Across that scattering of communities in north Kent and south London, there are implications of retraining, relocation and redundancy for many of my constituents and those of other hon. Members from our region. I know that Glaxo-Wellcome will do all that it can to ensure that the impact of those moves bears down as lightly as possible on the individuals and families affected. In particular, I commend some of the ideas that my hon. Friend put before the House this evening.

I, too, regret the probable loss of the expertise that has been built up over the years at the Beckenham site. To craft up and build over generations a team with real expertise in the pharmaceutical world and to see it broken up is something I regret, and I am sure that most hon. Members would feel the same.

I must also pay tribute to the work of Councillor Kenneth Leadbeater, the leader of the Conservative group on Dartford borough council, who has done so much to assist the formation of policy between town and company and who has made a special journey to be here for this debate tonight.

I am impressed with the way in which the new Glaxo-Wellcome formation has dealt with me, as a Member of Parliament. I too have seen Sir Richard Sykes and I have the opportunity of another meeting in the near future. I want to place on record, however, my great concern about the decision. There are implications for my constituents and I know that the Minister, who is a Kentish Member, will do all that she can to assist those of our constituents who will be affected by the closure of the site.

Photo of Ann Widdecombe Ann Widdecombe , Maidstone 10:50 pm, 27th June 1995

I congratulate my hon. Friend the Member for Beckenham (Mr. Merchant) on obtaining this debate, Mr. Deputy Speaker—Sir Geoffrey—and on the way in which he put his case. It would also be right to record that, in addition to my hon. Friend the Member for Dartford (Mr. Dunn), my hon. Friends the Members for Chislehurst (Mr. Sims), for Ribble Valley (Mr. Evans) and for Castle Point (Dr. Spink) have all shown an interest in this important subject. Regrettably, no Opposition Members have shown an interest in this debate.

By responding so quickly to last week's announcement, my hon. Friend the Member for Beckenham is seeking to ensure that the impact of this closure on employees and the local community is addressed and, furthermore, that the maximum amount of opportunities are made available to those affected. I certainly share his concern for the area and for the people involved and I thank him for reminding me of my constituency concerns in this issue. The relocation of an area's major employer is always a matter of regret and concern, not only for its employees, but for associated suppliers, contractors and the local community at large. I hope that those affected by last week's announcement will be reassured by the importance that my hon. Friends have attached to this issue.

The proposed closure of the research and development centre and the whole Beckenham site is part of a broader announcement on rationalisation, which follows the merger of the Glaxo and Wellcome companies after Glaxo's takeover in March. While Glaxo-Wellcome recognises the major scientific contribution made by Wellcome's Beckenham laboratories and the high reputation that they have gained, the company has decided that it must now refocus its research and development activities to remain the world leader in an industry which is changing at an unprecedented rate.

The Beckenham site employs 1,500 people and contains some outstanding skills in leading edge technologies such as biotechnology, for example. It is important that those skills are developed and that full advantage is taken of them. The activities of the research and development centre, which employs some 1,300 staff, will move to the company's brand new, state-of-the-art research centre in Stevenage—I am sure that my hon. Friend the Member for Stevenage (Mr. Wood) will be delighted to welcome them—confirming the company's continuing commitment to research and development in the United Kingdom. It is also maintaining its manufacturing sites in this country.

Glaxo-Wellcome currently expects a significant number of the 1,300 research and development staff to be offered relocation to the Stevenage centre, but cannot offer any specific numbers at this stage. Therefore, it is still unclear what proportion will be made redundant as a result of the Beckenham site closure, and until offers have been made individuals will not be able to assess their acceptability. We know, however, that the centre will be run down over three years, so the impact on the constituency of my hon. Friend the Member for Beckenham will be phased.

In raising the matter in the House at the earliest opportunity my hon. Friend has highlighted its importance to his constituency. As he said, it is never too early to plan for the consequences of such a closure. Glaxo-Wellcome has already consulted key partners to discuss how support and assistance can be provided to those affected. The company has stated that it recognises that the closure will have an impact on the Beckenham and Bromley communities, and it has already held discussions with Bromley council, the local training and enterprise council and the Employment Service to work out ways of alleviating the effects of the closure.

Only yesterday John Howell, chief executive of SOLOTEC, the local training and enterprise council, met the company chairman of Glaxo-Wellcome and representatives from Bromley council to discuss the support that can be provided to staff who either are not offered, or do not wish to accept, a transfer to the Stevenage site. I am informed that at that meeting a decision was taken to establish a task force with an immediate remit to undertake a detailed audit to identify the skills, current jobs and experience of individual employees. When the detailed information has been collected and assessed, an action plan will be drawn up to address the impact of the closure, taking into account the skills and experience of individuals.

The south London district of the Employment Service has agreed to collaborate formally with SOLOTEC to provide the most effective service possible to Glaxo-Wellcome employees and others affected by the closure. I am sure that by working in partnership and pooling skills, resources and information, the Employment Service can provide an even more efficient response to the situation. I understand that at yesterday's meeting an immediate start was made to specify the support that should be provided. In broad terms, the Employment Service will offer interviews to redundant employees to provide advice and guidance on the options available. Interviews can take place either on company premises or in local Employment Service or TEC offices.

The matters for discussion are likely to be wide ranging, but outcomes could include a reference to SOLOTEC, signposting to other agencies for specialist assistance, and arrangements for a follow-up interview with the same counsellor to monitor progress. The TEC will help individual employees to identify job requirements and to define appropriate training needs, and will discuss ways in which these can be met. The TEC will also advise on the possibilities for self-employment and business start-up.

The wide variety of programmes and services offered by both the TEC and the Employment Service will be available, as appropriate, to Glaxo-Wellcome employees and others affected by the site closure. The aim will be to offer targeted, practical and relevant advice to all who need it. I am well aware that the closure of the Glaxo-Wellcome site in Beckenham could result in the redundancy of some highly skilled individuals and I am confident that the Employment Service and SOLOTEC will work together to ensure that every possible effort is made to provide suitable advice and guidance to those individuals. I also understand that the executive job club in Bromley will enhance its existing provision to address the specific needs of that particular client group. Glaxo-Wellcome has promised support and assistance to its employees throughout this difficult period.

My hon. Friend also asked about the future of the Beckenham site. He will be interested to know that the Government office for London has been in touch with the London First centre, which receives funding from the Department of Trade and Industry to act as the inward investment agency for London. One of the London First centre's priorities is to develop a portfolio of sites which will contribute to the overall marketing of London to potential investors. It works in close collaboration with English Partnerships and the Government office for London in that respect. The London First centre will meet Glaxo in the next few weeks to discuss a range of issues, including what action might be taken over the Beckenham site.

As my hon. Friend may be aware, this is not the first time that a London TEC has had to respond to the closure of one of its major employers. Following the closure of the British Aerospace site in Kingston, the local TEC—AZTEC—was instrumental in drawing together the local authority and other key partners to make recommendations for dealing with the effects of such a closure. I am certain that SOLOTEC, Bromley council and the Employment Service, in conjunction with Glaxo-Wellcome, will respond in an equally positive way.

I emphasise to my hon. Friend that, although any addition to unemployment is deeply unwelcome, in his constituency unemployment has fallen by almost 12 per cent. in the past year—faster than in the London region as a whole.

It is important for us all that Glaxo-Wellcome should continue to thrive in the ever more challenging world of the international pharmaceutical industry. The company has made the commercial judgment that rationalisation of its sites is unavoidable. I am sure that Glaxo-Wellcome will wish to conduct the Beckenham site closure in a professional manner and will continue to be actively involved in alleviating the impact on its employees and the local community. I know that SOLOTEC and the Employment Service will ensure that appropriate counselling, guidance and retraining are made available. I shall keep in touch with developments and ask SOLOTEC and the Employment Service to keep me fully informed. I hope that my hon. Friends the Members for Beckenham, for Chislehurst and for Dartford, and all other hon. Friends with an interest in the subject, will feel free at any time to bring to my attention any further concerns that they may have.

Once again, I congratulate my hon. Friend the Member for Beckenham on securing this debate. The interest of other hon. Members clearly shows the importance that should be attached to it. Moreover, the running commentary that was kept up throughout the debate shows the excitement that it has occasioned.

Question put and agreed to.

Adjourned accordingly at two minutes past Eleven o'clock.